State Legislature Wraps Session with Unbalanced Budget

Apr 25, 2014

State lawmakers approved an unbalanced budget in the just-completed session. But, Arizona Public Radio's Howard Fischer reports that did not stop them from cutting taxes, again.

Gov. Jan Brewer

The issue of tax cuts is important because of that structural deficit — $9.2 billion in expenses and $8.7 billion in revenue, with the difference made up from what's left from the now-expired temporary one-cent sales tax. Legislative budget staffers predict red ink now that that money is gone. That did not stop lawmakers, who already enacted hundreds of millions in tax cuts, from taking another whack at it with several new breaks and credits.

Meanwhile, Gov. Jan Brewer’s budget analyst is predicting faster economic growth, and black ink in two years. So she’s not buying the idea that there’s a deficit in the state’s future — and that continued tax cuts are a bad idea.

“We have done a heck of a job creating what we've been able to do in the last few years. Because when I became governor, we came in with a plan. And that plan has worked. And it will continue to work as long as it is continued out,” Brewer said.

Economist Jim Rounds said the state has done a good job of making itself more competitive with lower taxes. But, he said Arizona is at the point where future cuts won’t have the same bang for the buck. Arizona State University economist Dennis Hoffman was more succinct.

“I don’t think you're going to get more economic growth with more tax cuts in the state. Because if tax cuts were the key to prosperity, we would be swimming in a pool of prosperity right now. We have clearly maximized on the tax-cut train.”